2017 Agent Forums North Dakota Insurance Department Oct. 2-6, 2017
Agenda Welcome and Overview Jon Godfread Commissioner Producer Licensing Division Kelvin Zimmer Producer Licensing Division Director Ethics for Insurance Producers Jeff Ubben Deputy Commissioner/General Counsel Consumer Assistance Division David R. Zimmerman Consumer Assistance Division Director Product Filing Division Chrystal Bartuska Product Filing Division Director Questions and Wrap Up 2
Welcome and Overview Jon Godfread Commissioner North Dakota Insurance Department
About Me 4
Changes Being Made in the Insurance Department More responsive More engaging More collaborative Involvement in the NAIC 5
New Insurance Department Facebook Page Your go-to source for all things insurance! 6
Biannual Agent Newsletter 7
What Will Remain the Same? The North Dakota Insurance Department Mission: “It is the mission of the North Dakota Insurance Department to protect the public good by fairly and effectively administering the laws of North Dakota. We are committed to vigorous consumer protection efforts while fostering a strong, competitive marketplace that provides consumers with choices and access to high-quality insurance products and services at competitive prices. In pursuit of our mission, we will treat all of our constituencies with the highest ethical standards and respect they deserve.” We all have the same goal, a great consumer experience for North Dakota consumers. 8
What’s Going on in D.C.? Health insurance Flood insurance 9
Producer Licensing Division Kelvin Zimmer Producer Licensing Division Director North Dakota Insurance Department
Producer Licensing Division Two producer licensing specialists Application review and approval Renewal review and approval Producer and agency assistance Continuing education course review and approval Maintaining systems Collaboration with other divisions 11
Numbers Individual: Resident producers – 5,823/5,874/5,935 Non-resident – 58,463/60,778/63,399 Surplus lines resident – 50/51/47 Surplus lines non-resident – 1,184/1,259/1,284 Total: 65,600/67,962/70,665 Business Entity: Resident producers – 872/912/924 Non-resident – 5,014/5,195/5,431 Surplus lines resident – 15/14/11 Surplus lines non-resident – 473/490/515 Total: 6,738/6,611/6,881 Grand Total: 72,338/74,573/77,546 12
N.D.C.C. 26.1-26-13.3 Requires fingerprints for all first time applicants applying for a North Dakota resident producer license Effective Sept. 1, 2013 2,311 fingerprints taken 2016 – 1,761 2015 – 1,181 2014 - 663 13
Reporting Requirements Administrative Actions: An insurance producer must report to the Commissioner any administrative action taken against his or her license in any other state or U.S. Territory or any actions taken against him or her by any other North Dakota governmental agency, board or commission within 30 days of the closing of the matter. This report must include an explanation of the action, copy of the order and consent to order or relevant legal documents. Reports can be made via e-mail or on the NIPR website. 14
Reporting Requirements cont. Criminal Convictions: Within 30 days after a criminal conviction, an insurance producer must report to the commissioner any criminal conviction, no matter where it occurred. The report must include an explanation of the conviction, copy of the initial complaint and the order issued by the court and any other relevant legal documents. Reports can be made via e-mail or on the NIPR website. 15
Renewal Reminders Every two years in your birth month 90 days prior All CE requirements must be met 24 total hours Must include three hours in ethics Midnight is the deadline No more yellow post cards – email notification There is NO grace period. 16
SBS External Tools License Manager Lookup www.statebasedsystems.com 17
Update Name/Address/Email www.nd.gov/ndins/producers/resident/update 18
Update Name/Address/Email cont. 19
www.nd.gov/ndins/producers 20
Mobile Access 21
Ethics for Insurance Producers Jeff Ubben Deputy Commissioner/General Counsel North Dakota Insurance Department
Legislative Update HB 1112 – Department agent licensing bill: Bill does four things: 1. Adds definitions of “breach of trust” and “dishonesty” to clarify what crimes are felonies involving dishonesty or breach of trust. 2. Clarifies the Commissioner’s authority to deny, revoke or refuse to renew an insurance producer license where an applicant or licensee has been convicted of one of these felonies. 23
Legislative Update cont. HB 1112, cont.: 3. Clarifies that the Commissioner has the authority to deny a license if an applicant is not competent, trustworthy, financially responsible and of good personal and business reputation. 4. Clarifies that these rules outlined above apply to both applications for an insurance producer license and an application to renew an existing insurance producer license (requirements for licensing). 24
Legislative Update cont. HB 1112, cont.: Legislation allows the Commissioner to protect consumers from unqualified producers attempting to sell them insurance. Also benefits the insurance producer by preventing unqualified individuals from competing with and working among qualified producers. Status: Passed (91-0) in the House on Jan. 12. Passed in Senate (45-0) on Feb. 21. Signed by Governor on March 2. Emergency clause carried, so it was effective March 2. 25
Legislative Update cont. SB 2105 – Exempting insurance producers’ home address from the open records law: We received requests for contact information for insurance producers from outside parties and we are required by open records law to provide it. The Insurance Department believes an individual has an increased expectation of privacy in their home and in their home address. Status: Passed (45-1) in the Senate on Jan. 12. Passed in House (89-0) on March 3. Signed by Governor on April 3, became law Aug. 1. 26
Legislative Update cont. SB 2231 – Air ambulance regulation: Protects consumers from massive, unexpected balance bills by regulating the business of insurance Balance billing issues Status: Signed by Governor on April 10. 27
Legislative Update cont. SB 2140 – Allows an insurance producer to give certain gifts up to $100 per person per year (previous limit was $50 per person per year): Status: Signed by Governor on March 9, became law on Aug. 1. SB 2317 – Would have allowed a producer to charge both a commission and a fee on a transaction so long as the fee was disclosed to the consumer and the consumer consented to the fee in writing: Status: Failed (13-32) in the Senate on Feb. 17. 28
Common Question Question: When I’m acting as an insurance producer, may I collect both a commission from the insurance company and a fee from the person I sell to? Answer: No. You can only represent one party in a transaction. Collecting fees from both parties to a transaction goes against this concept as it creates conflicting financial incentives for the agent and detracts from the complete loyalty owed to the party being represented by the producer. N.D.A.G. Op. 99-F-03 29
Professional Ethics What are professional ethics? What are the duties of insurance producers? Why does the Insurance Department care? 30
Non-compliance Penalties A fine of up to $10,000 per violation Suspension, revocation or non-renewal of insurance producer license Other administrative action allowed under the law 31
Advertising and Mailing Rules Where to find advertising and mailing rules: Life Insurance – N.D.A.C. 45-04-10 Accident and Health Insurance – N.D.A.C. 45-06-04 32
Types of Advertising Covered Advertisement is broadly defined. Examples include: Printed and published material Audiovisual material Print, radio and TV content Billboards Sales aids Lead cards Form letters Sales talks and presentations 33
Who is Responsible for Ensuring Compliance? Both the insurance company and the producer/broker are responsible for ensuring all advertisements comply with the law. Responsibility cannot be assigned to a third party. If a third party creates an advertisement, the producer/broker MUST review the product to ensure compliance with laws and regulations. Insurers are required to maintain a file of every printed, published or prepared advertisement of its policies. 34
Common Violations Common violations include: Failing to include the name of the insurer and the name of the producer or broker. N.D.A.C. 45-04-10-04 (1) Using misleading wording. Example – using wording which gives the impression that a government entity endorses, is supported by or is connected with the product. N.D.A.C 45-04-10-04 (2), 45-04-10-05 (3), N.D.C.C. 26.1-04-03 Failing to include the words “life insurance” on advertisements for life products. N.D.A.C. 45-04-10-03 (5) 35
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